HONG KONG, Sept 28 (Reuters) - At least five insurers, including Britain’s Prudential and Canada’s Sun Life , have bid for Commonwealth Bank of Australia’s (CBA) majority stake in an Indonesian insurance venture, people with knowledge of the process said.

The stake sale, which could value the venture at between $250 million and $300 million, has also received second-round bids from insurer FWD Group, Singapore-listed Great Eastern Holdings, and Indonesia’s Sequis Life, three people said.

Australia’s biggest lender is selling its 80 percent stake in PT Commonwealth Life, which has a presence in 20 Indonesian cities with more than 500,000 individual and group customers, Reuters reported in January.

The interest in PT Commonwealth Life is the latest case of foreign insurers wanting to expand their life business in Southeast Asia, a region of more than 600 million people.

In March, CBA confirmed that it was undertaking a strategic review of its Indonesian life insurance business, and that it has engaged external advisers for guidance on a possible sale of the venture.

The second-round bids were submitted last week, the people said, adding potential buyers are likely to be further short-listed within the next few weeks before a decision is made by CBA.

Representatives of CBA, FWD, Great Eastern, Prudential, and Sun Life declined to comment. Sequis did not immediately respond to a request for comment.

The people declined to be named as they were not allowed to talk to the media about the deal process.

The Australian lender has been selling some of its businesses over the past year after suffering a string of scandals including rate-rigging charges, breaches of anti-money laundering laws, and fees charged to dead clients.

CBA sold its insurance business in Australia and New Zealand to AIA Group for $3.1 billion last year. It also said this year its loss-making digital banking unit in South Africa was being sold for an undisclosed sum.

The Indonesian stake sale, if completed, will also be another instance of Asian banks exiting the insurance sector to free up capital and focus on their core banking businesses amid tougher regulatory capital buffer requirements.

GROWING MARKET

Asia is a battleground for foreign insurers including Aviva , Prudential and Sun Life, attracted by the region’s lower insurance penetration levels and faster growth rates for insurance premiums.

The people said the foreign insurers competing for CBA’s stake in the Indonesian venture were looking to bolster their presence in Southeast Asia, which has seen a handful of M&A deals in the last couple of years in the insurance sector.

Swiss group Zurich Insurance said on Thursday it was acquiring an 80 percent stake in Indonesia’s Adira Insurance from PT Bank Danamon Indonesia and a minority investor for at least $414 million.

FWD, owned by Hong Kong billionaire tycoon Richard Li, has agreed to buy HSBC Holdings’ stake in a Malaysian insurance joint venture as part of a plan to expand its presence in Asia, sources told Reuters last month.

Sun Life, which operates in seven Asian markets including China, Hong Kong, India, the Philippines and Malaysia, has in recent years made a series of deals in the region to acquire businesses or raise its ownership in several of those markets.

CBA raised its holding in Commonwealth Life to 80 percent in 2007 in what was then a 50:50 joint venture. The remaining 20 percent is owned by an Indonesian firm, PT Gala Arta Jaya, according to the insurer’s website.

Besides the insurance joint venture, CBA also has a retail and business banking presence in Indonesia. (Reporting by Sumeet Chatterjee; Additional reporting by Anshuman Daga in Singapore, Paulina Duran in Sydney and Fanny Potkin in Jakarta; Editing by Muralikumar Anantharaman)